ABSTRACT
This chapter presents a new body of analysis that develops the debate regarding the efficiency characteristics of a market for state-contingent claims, the UK horse-race betting market. A hitherto unavailable source of data relating to the UK pari-mutuel betting market is used to explore the existence of differences in returns between that market and the parallel bookmaker-based market. This offers a more comprehensive investigation of an issue addressed by the influential work of Gabriel and Marsden (1990, 1991). The results invite a reconsideration of the degree, form and origins of market efficiency within the aggregate horse-race betting market.
